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These are the key commercial real-estate deals and trends to watch: data-center investment surge; flex-space consolidation
Katie Warren/Business Insider
The pandemic threw the real-estate world into disarray, as people emptied out of offices, hotels, and malls and worked from their homes. That disruption has transformed how people and companies finance, operate, and occupy real estate.
Some big firms like WarnerMedia and Uber have been rethinking office needs — and some commercial real-estate deals were put on ice as financing dries up. Coworking and flex-office firms are struggling under big rent obligations after years of rapid growth.
Still, some companies like IBM and Facebook have been pushing ahead with plans for big office spaces, showing that it may be too soon to call and end to the office. Apple has been in talks to grow a Manhattan office that it leased earlier this year. And Amazon Music has signed on for 40,000 square feet in Williamsburg, Brooklyn, to use as production and recording space.
A surge in e-commerce, meanwhile, is fueling demand for warehouse and cold storage space as companies look for new ways to reach customers. Life-sciences companies are fueling a big boom in demand for lab space. A surge in streaming content consumption and cloud data needs has made studio spaces and data centers red-hot real estate plays.
And with the pandemic increasing the amount of food delivery and hurting restaurants' bottom lines, ghost kitchens have been seeing a rush of venture funding.
Here's the latest news on how real-estate markets are being upended, and how experts think these markets will play out in the long run.
Latest commercial real-estate news
Uber is looking to dump a big chunk of a huge new NYC office it recently signed. It's an abrupt turnaround for the ride-hailing giant.
Uber and Lyft driver Adama Fofana, who says he and other drivers he knows have "fear in their stomachs" about contracting the coronavirus disease (COVID-19) while working, but cannot cut their hours because they need the income to survive, sprays disinfectant in his car in New York City
REUTERS/Joe Penney
REUTERS/Joe Penney
Flex-workspace firm Breather has hired bankers to explore options including a sale, and it's a sign of a bigger consolidation push as office demand tanks
Flex-workspace firm Industrious is eyeing a big expansion in Asia and just inked its first deal outside the US
Knotel just slashed headcount again, with the flex-space provider's CEO telling staff he expected more of a bounceback in office demand by now
Knotel
WeWork is demanding overdue rent from hundreds of small businesses and threatening to send them to collections agencies if they don't pay up
Reuters
ByteDance quietly leased 'massive' data centers in 2020, a sign it may have planned to shift TikTok operations to the US
Goldman Sachs, KKR, and Blackstone are pouring billions into data centers, a hot real-estate play that's chasing a boom in cloud storage and streaming content
Advertising and PR giant Dentsu is the latest corporate tenant to cast off glitzy NYC offices as more companies rethink their footprints
AT&T is putting WarnerMedia's huge NYC headquarters under review and could decide to cut hundreds of thousands of square feet of office space
Studio space is a red-hot real estate play as demand for streaming content surges, and insiders say Brookfield could be the next big investor to pile in
Booming demand for lab space is a rare bright spot for real-estate developers. But a steep learning curve means some 'stupid money' investors could get burned.
Hinterhaus Productions/Getty Images
IBM is hunting for a 500,000 square foot NYC office as tech tenants continue to double down on deeply-discounted workspaces
Inside the rise of real-estate titan David Simon, the country's top mall-owner facing a make-or-break moment with a $2 billion bet on troubled JCPenney
Mireya Acierto/Getty Images; Samantha Lee/Business Insider
Facebook scored a $100 million break on its blockbuster NYC office deal, and it could mark the start of a wave of discounts as vacancies soar
Vornado Realty Trust.
Giant mall owner Brookfield Properties is ditching its worst locations and redeveloping what's left into 'mini cities' that blend shopping with residential space
Hotel lenders are racing to dump risky loans as the hospitality industry nears a breaking point, with defaults stacking up and high-profile properties starting to shutter
John Nacion/NurPhoto/Getty Images)
- 5 commercial real-estate investors who are raising billions laid out the red-hot opportunities and strategies they're leaning into after a major market upheaval
- Demand for lab space is booming, and real-estate giant JLL just hired a new life-sciences expert to lean into the opportunity
- Here's what execs at Bank of America and JPMorgan are thinking about where they'll open and close brick-and-mortar branches as digital banking adoption soars
- Citi's CFO says the bank is shrinking its office footprint and moving people to lower-cost locations to help keep expenses in check
- Facebook bought REI's abandoned HQ because it thinks offices are 'still vitally important' despite the rise in remote work — and it's just the latest sign that Big Tech isn't slowing real estate plans
- Authentic Brands may join Simon and Brookfield in a rescue of JCPenney, allowing the new owners to populate the department store chain with Authentic's stable of retailers
- Amazon just leased a new space in Brooklyn to house recording studios for its music-streaming service, as Big Tech keeps gobbling up space while the office market flounders
What top investors and dealmakers are saying
- Blackstone's co-head of real-estate explains why the giant investor is still betting on office properties — and lays out the industries where demand for in-person workspaces are the strongest
- Commercial real-estate hiring is heating back up. From strategy-focused exec jobs to the red-hot industrial space, 4 recruiters lay out roles they're trying to fill.
- Meet the 4 dealmakers driving Blackstone's $325 billion commercial real estate portfolio. They walked us through how they're thinking about opportunities in the downturn.
- The CEO of real estate heavy-hitter Eastdil explains the types of deals that are must-do right now — and warns that a 'de-retailing' trend is set to accelerate
Tech office deals
- The Big Tech office isn't dead. Here's why giants like Facebook and Amazon keep gobbling up space while telling workers they can stay home.
- Facebook thinks in-person collaboration can't be fully replicated remotely and is betting on physical office hubs in big cities as key recruitment tools
- Apple is in talks to potentially expand its NYC footprint. It shows how tech is becoming a lone bright spot for a battered commercial real-estate market.
- Facebook just reached a blockbuster deal to lease the massive Farley Building in NYC as a tech and engineering hub. Here's why it's a huge win for a shaken office market.
- Facial-recognition experts say the pandemic is a huge tipping point for office landlords embracing the tech. Here's how they're pitching the idea.
- SL Green is looking to sell a $1.1 billion Amazon-anchored building to buy back its shares. Here's a look at its strategy to defend its share price as the office market tanks.
- IBM is on the hunt for a massive Manhattan space, showing that worries about the death of the big-city office may be overblown
- Companies from banks to tech giants are looking to shed huge chunks of office space. Here's a look at 8 key sublease offers — and what they mean for rents in big-city markets.
- Facebook is eyeing offices in cities like Dallas, Atlanta, and Denver to act as 'hubs' to support 50% of its workers staying remote — and it's a move that could upend Silicon Valley and NYC real estate
- A blockbuster Facebook office deal is a make-or-break moment for the future of commercial real estate. 3 leasing experts lay out the stakes.
- IBM is ditching a big WeWork office it has been renting in NYC — showing risks for the flex-space model as the pandemic prompts big companies to rethink real-estate needs
Restaurants and ghost kitchens
Hotels and casinos
- Here's the pitch deck that Koala, a startup bringing an Airbnb-style marketplace to the wonky timeshare industry, used to raise $3.4 million
- Investments in risky hotel debt could get wiped out as travel gets slammed — and one group of lenders may see an outsized hit
- A growing group of lenders are looking to unload hundreds of millions of dollars of souring hotel loans. Teams hired to sell the portfolios say it's just the beginning of a surge in activity.
- Billions of dollars of Las Vegas development hang in the balance right now, but the owner of Caesars Palace sees the city's crisis as an opportunity to imagine its next mega-project.
- The lender to a trendy Brooklyn hotel is looking to offload an $80 million mortgage as the hospitality sector craters — and it's the type of deal distressed-debt investors have been waiting for
- Blackstone bet big on 4 huge Las Vegas casinos. Then the coronavirus brought Sin City to a halt, right as the PE giant was trying to unload one of its multi-billion-dollar jewels.
- Hospitality startup Sonder is pushing ahead with plans to open its largest NYC apartment hotel yet as coronavirus cripples the travel industry
Student housing
- A student housing developer is facing congressional scrutiny after it pressured colleges to bring kids back to campus in order to keep dorms full
- A student-housing developer is facing backlash after pressuring schools to bring college kids back to campus so it could keep its revenues up
- Big investors poured billions into student housing — thinking it was a recession-proof bet. Then the pandemic emptied campuses and turned that thesis on its head.
Warehouses and logistics
- Neighbor, an Andreessen Horowitz-backed startup that wants to be the Airbnb of self-storage, has started partnering with landlords to turn empty offices into spaces for people's stuff
- Cold storage is 2020's red-hot real estate play. Here's how the private-equity backed industry leader is spending $500 million to tighten its grip on the market.
- Real estate developers are building costly cold storage space before they even have tenants. They're betting the risky move could be a winning investment as grocery delivery booms.
- Logistics startup Bond has teamed up with SoftBank-backed REEF Technology to bring nano-warehouses to parking lots across the US. Here's how they're building the distribution hubs of the future.
- Amazon just signed its largest-ever warehouse lease in NYC. Here's how it's been making deals left and right to grow its massive storage and distribution network.
- Amazon just signed a lease on a huge NYC warehouse used by one-time rival Jet.com. The e-commerce giant has been gobbling up industrial space as demand for deliveries surges.
- Warehouses are the new darling of commercial real-estate thanks to a surge in e-commerce, with firms like Macy's and Boeing selling while Amazon snaps space up
- A surge in grocery deliveries is creating a huge opportunity for industrial real-estate developers. Here's how the coronavirus is transforming retail and warehousing.
- Bond, which has raised $15 million from investors including Lightspeed, wants to become the Shopify of logistics by turning vacant retail space into warehouses
Brick-and-mortar retail space
- Markets for retail and office space are under enormous pressure. A foreclosure in the works for a building on NYC's glitzy Fifth Avenue shopping corridor shows just how bad it's getting.
- Real-estate developers are betting on a risky strategy to reimagine retail space in hopes of rescuing struggling shopping centers
- JCPenney has hired brokers to sell off 163 locations across the US as the department-store chain slashes its footprint and tries to emerge from bankruptcy
- Neiman Marcus' shocking exit from glitzy Hudson Yards strikes a huge blow to the $25 billion project. The departure could unravel one of the most expensive mega-malls in US history.
- Brookfield CEO Bruce Flatt lays out how retail and office space can still thrive and why private infrastructure is the next big opportunity
- Bankrupt Neiman Marcus's $80 million flagship store in the glitzy Hudson Yards mega-mall is now being marketed as office space. It's another black eye for the city's retail market.
- Inside a 'big short' bet against malls: Investors are claiming wins, and a research analyst who said the wagers were misguided is out
- Lease obligations are 'suffocating' retailers — and a potential court fight over a Victoria's Secret flagship NYC store highlights a wider battle between tenants and landlords
- Neiman Marcus just filed for bankruptcy, and it could mark a major blow to NYC's glitzy Hudson Yards — one of the most expensive mega-malls in US history. Here's why.
State of the commercial real-estate market
- A top Americas exec at commercial real-estate giant Cushman & Wakefield is out
- Lenders are balking at financing mega commercial real-estate deals — and that's leaving buyers for buildings like the Transamerica Pyramid in limbo
- Global firms are cutting down on their real-estate footprint as CEOs across industries are considering a permanent switch to remote work
- Inside the drama over control of the iconic Chrysler Building: A real-estate tycoon and a prestigious college are renegotiating a critical $150 million deal
- Real-estate tycoon Aby Rosen is abandoning $600 million worth of acquisitions as the coronavirus slams New York City's multibillion-dollar sales market
- Major tenants are delaying big leases in NYC as they re-think their office space needs for the post-coronavirus world
- 7 charts show how the coronavirus could clobber real estate, from retail vacancies of nearly 15% to plunging office rents in Texas cities
Coworking, coliving, and short-term rentals
- WeWork rival Knotel just told staff it's looking to raise $100 million as it faces a turbulent office market and a host of unpaid bills
- WeWork is turning to big brokerages like CBRE and JLL to help it find customers. It's a huge strategy shift that shows how hard office space is to fill right now.
- Wells Fargo is ditching a 750-person WeWork space, while Citi inked a deal with the flex-office giant far from a big city. Here's a look at how financial firms are retooling their real estate.
- WeWork is looking to fill 2 million square feet of vacancies in New York City, its biggest market. Here's what's sitting empty.
- The short-term rental market is consolidating in big cities as demand surges in rural areas. Here's how startups like Sonder are taking advantage of the shakeout.
- Office-rental startup Knotel bragged it was a nearly profitable anti-WeWork. Now lawsuits are stacking up. 12 insiders reveal what happened to the $400 million Knotel said it raised last year.
- WeWork is leasing a big new office in Jersey City to house the headquarters of a planned spin-off from pharma giant Merck. Here's how the deal will work, and why it's a big win for the struggling coworking giant.
- Women-focused coworking startup The Wing is almost $270,000 behind on rent and other charges at its Bryant Park location in New York, according to lawsuit
- Co-living is the real-estate industry's big bet on dorm-like housing for young professionals. Here's why players like Nuveen and Cushman & Wakefield remain bullish even during the pandemic.
- WeWork is ditching a major Manhattan office it hasn't even moved into yet — and it's the first big step in a turnaround that's put its entire real-estate portfolio under review
- Vacancy rates are soaring above 15% in Washington DC's normally recession-proof office market. Here's how industry players think this downturn will shape up — and why some are still optimistic.
- Leaked financials from WeWork rival Knotel show huge pre-pandemic losses and a shrinking cash pile. It's a grim sign for the flex-office space.
- After 2 layoff rounds, a valuation nosedive, and chaotic landlord negotiations, Airbnb-backed Zeus Living is shifting its business model. Here's how the corporate-housing startup is moving forward.
- WeWork's US head of real estate is leaving the coworking giant as the firm works through a major turnaround attempt
- WeWork is rolling out global layoffs over Zoom and has kicked off talks to slash jobs in the UK as the coworking giant struggles to cope with coronavirus fallout
- Knotel and insurance startup Rhino didn't disclose its CEOs were brothers when it struck a complex financial deal. Now a key partner could be on the hook as Knotel scrambles to pay bills, slashes staff, and plans to shed portions of its portfolio.
- WeWork's revenue growth rate was cut in half in Q1
- As WeWork and flex-space rivals stumble, 18 million square feet of space in NYC is at risk. Here's what that means for the real-estate market.
- Airbnb and RXR Realty are scrapping a partnership at Rockefeller Center that the home-sharing giant had touted as a '21st-century hospitality model'
- Airbnb-backed corporate housing startup Zeus Living is asking landlords to renegotiate their leases and withholding April and May rent until they sign
- Knotel is scrambling to pay millions in bills that started stacking up before the coronavirus hit, and hasn't paid April rent at some locations
- Leaked documents from Knotel show the WeWork competitor struggled to hit financial targets well before the coronavirus hit
- 'This is the day of reckoning' for companies like WeWork. 10 real-estate insiders lay out the future of flex-offices, and how employers are preparing now.
The future of real estate
- Here's the 21-slide pitch deck construction-tech startup Mosaic used to lay out its vision for the future of homebuilding and nab $14 million from backers including Andreessen Horowitz
- Burning through cash and nothing coming in: We talked to 7 VC investors about what's keeping them up at night in their proptech portfolios
- Real estate giant CBRE has an 'unparalleled' amount of data. Its tech chief lays out how it's putting it to good use.
- How commercial real-estate giant JLL is revamping its trainee program to help early-career brokers land deals
- Companies need to add contactless-entry tech to safely reopen offices. Here are 7 firms ranging from startups to huge conglomerates that are set for a surge in business.
- A smart home startup that raised $41 million from Amazon and Bain just launched an app that lets landlords and residents give remote access for deliveries, guests, and self-guided tours
- Here's which real-estate tech startups will soar and which will flop in the new normal of how we occupy space, according to 7 top proptech VCs
- 10 CEOs from Coldwell Banker, JLL, Cushman Wakefield, and more lay out a post-pandemic future of how we'll buy, build, and use real estate
- The office as we knew it is dead
- Mandatory temperature-taking is largely seen as a critical way to return workers to offices. But some big NYC landlords are worried about its effectiveness.
- The future of real estate could be virtual open houses on Facebook. Coldwell Banker's CEO explains why the in-person industry needs to embrace going digital.
- 'We should be prepared for a new normal': 3 real estate experts on how the coronavirus is transforming offices and accelerating the rise of industrial property
- Virtual tours are being hyped as a way for commercial real estate giants like CBRE and JLL to keep deals flowing. Here's a look at how they work — and what factors they can't replace.
- Real-estate services giant JLL explains how the coronavirus could usher in a permanent 'paradigm shift' towards more remote work
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